Natural Gas Price Fundamental Daily Forecast – Taking Out $1.881 Could Trigger Acceleration to Upside

Natural gas futures are trading higher at the mid-session on Tuesday after posting another contract low earlier in the session. The inability to follow-through to the downside after posting new contract lows two out of the last three sessions may be indicating that buyers are coming in on weakness.

The chart pattern appears to be indicating the market is ripe for a rally, but the weather models are struggling to sustain cold weather. The cash market, however, is giving a mixed picture with prices down across most of the United States, but higher in the West. Natural Gas Intelligence (NGI) National Average rose 10.5 cents to $1.715.

At 16:50 GMT, March natural gas futures are trading $1.862, up $0.043 or +2.31%.

Tight Supply/Demand Balances May Be Limiting Selling Pressure

Bespoke Weather Services told Natural Gas Intelligence that otherwise tight supply/demand balances that have characterized the market over the past couple of weeks remained firmly intact on Monday, but weather continued to be uncooperative. Early Monday, small changes in the latest runs brought the American and European models “into very good agreement” regarding total forecast demand through the middle of February, according to Bespoke Weather Services. The firm saw more ridging at times around Alaska in the medium-range, but any cold was confined to the central/western states, with above-normal temperatures persisting in the East.

“This makes it difficult to get national demand any higher than near normal for a few days here and there, and means any weakening of the Alaska ridging would lead the forecast right back warmer,” Bespoke chief meteorologist Brian Lovern said.

Daily Forecast

The main trend is down according to the daily swing chart. However, the early price action indicates a potentially bullish closing price reversal bottom may be forming. If confirmed, this could trigger the start of a 2 to 3 day counter-trend rally.

The minor trend is also down. Taking out 1.880 will change the minor trend to up. This will also shift momentum to the upside.

The minor range is 1.963 to 1.804. Its 50% level or pivot is $1.881. Taking out this level will be a further indication of the presence of buyers.

Filing in the $1.963 to $1.977 price gap could trigger a move into the $2.004 to $2.051 retracement zone.